Fundamentals of a pairs trade
How to identify, select & execute the best pairs for trading
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Step 1. Sector Tracker – Identify Sectors & Stocks Moving with momentum
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Step 2. Check correlations (correlation tracker & sector charting)
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Step 3. Scanning for volatility momentum break outs, building a watch list
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Step 4. Trade Execution & using synthetic options
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Step 5. Profit take – Momentum reversal & legging out
